Hyundai Slows Down Its Quick Growth In Favour Of Higher Car Quality
Despite the fact that Hyundai is dealing with production capacity constraints, the Korean automaker still expects sales to grow by 4.4% this year.
The constraints are in place because Hyundai has decided to slow down their global expansion.
North American Chief Executive John Krafcik confirmed that the sales growth expectations where the same as those set back in February.
He also stated that the company’s US market share was down, with the global production cap set at t million vehicles annually.
Krafcik said that all of the US plants are running at maximum capacity in order to keep up with the demand. He confirmed that it was indeed the global cap that has led to the capacity constraints.
He explained that they have lost a little bit of market share since they are unable to grow as fast as the market demands.
New Plant Considered In USA?
Krafcik refused to comment on whether or not a new plant will be built in North America.
He did say that the company had taken a pause for a couple of years, but that he had no idea when that pause would end.
Hyundai has already stated that they are considering building more plants outside of South Korea.
Industry insiders believe that labor disputes and issues with the South Korean currency will force the automaker to look at opening more overseas assembly plants, but as yet there are no plans for another in the US.
Hyundai Sales Figures In The United States
Auto sales across the US rose by 9% in June, with the pace reaching its highest monthly level since November 2007. Hyundai, meanwhile, saw sales rise by just 1.9%.
Despit seeming to lag behind the pace, Hyundai is still well on track to hot 734,000 cars and SUV’s and a market share of 4.7%.
Krafcik revealed those figures while speaking at the company’s technical center near Detroit. Those numbers would compare to 2012 sales of 703,007 units and a 4.9% market share.
Krafcik believes that Hyundai will have better sales figures in the second half of the year, admitting that the demand for Hyundai vehicles had come back faster than anticipated.
Hyundai was one of the few automakers that performed well during the recent recession, but the lack of availability of new cars has slowed their progress somewhat. Us sales rose by 8.9% in 2012.
Krafcik said that at 44 days, the company’s inventory of vehicles in the US was the second lowest among non-premium brands.
That has allowed Hyundai to not have to use incentives for new buyers, with their average incentive coming in at $1,237.
That is the second-lowest among mainstream brands. He believes that there is no sense in putting incentive money into the US market at this current time.
Hyundai has already added a third shift to their plant in Montgomery, Alabama. That has added an additional 60,000 units to its annual output.
Krafcik believes that importing more vehicles from overseas may help with the constraint issue, just as it did last year.
Future Hyundai Models
Hyundai is also thinking of adding to their premium lineup, but no production plans have yet been approved.
A small crossover vehicle below the Tuscon may also be a future possibility, which confirms Hyundai wants to enter the fast-growing small SUV market.
The carmaker believes the crossover vehicles will gain in popularity, so future product plans would almost certainly be in the crossover segment.
This seems fairly obvious, especially since there is a lot of action currently going on in that segment.
Even Kia has been rumored to be working on Soul all wheel drive crossover.